Compare the market price of the target company with the value estimates using EV / E * BDITA ratio and P/E ratios.

Step 4: Follow the example in Q4-2, work out the relative valuation for your target company in the project

For your target company, also pick three to four companies in the same industry for comparison

• Collect financial statement for both the target company and its comparable.
• Estimate EBITDA P / E ratio, EV/EBITDA ratios for both the target company and its comparable
• Estimate the Enterprise value and equity value using the comparable EV / E * BITDA ratios
• Estimate the equity value using the comparable P /E ratios.

Compare the market price of the target company with the value estimates using EV / E * BDITA ratio and P/E ratios.